Tag Archive: China

Watching Imports

2018-05-11

by

2018-05-11

US Trade Balance, Jan 2014 - May 2018
The US trade deficit, a sensitive political topic these days, declined sharply in March. It had expanded significantly (more deficit) in January and February, reaching nearly -$76 billion (seasonally adjusted) in the latter month, before posting -$68 billion in the latest figures. Exports rose while imports fell in March, making for the largest single month change in the trade condition in many years.

Read More »

FX Daily, May 08: Dollar Races Ahead

2018-05-08

by

2018-05-08

The US dollar's surge continues. The Dollar Index is testing the space above 93.00. A month ago it was below 90. It does not appear to require fresh developments. The market continues to trade as if there are short dollar positions that are trapped at higher levels and the briefest and shallow pullbacks are new opportunities to adjust positions.

Read More »

Emerging Markets Preview: The Week Ahead

2018-05-08

by

2018-05-08

EM FX came under intense selling pressures last week. The worst performers were ARS, TRY, and MXN while the best were PHP, KRW, and TWD. US rates are likely to remain the key driver for EM FX, and so PPI and CPI data will be closely watched this week. We believe EM FX will remain under pressure.

Read More »

China’s Exports Are Interesting, But It’s Their Imports Where Reflation Lives or Dies

2018-04-19

by

2018-04-19

China Exports, Jan 2008 - 2018
Last month Chinese trade statistics left us with several key questions. Export growth was a clear outlier, with outbound trade rising nearly 45% year-over-year in February 2018. There were the usual Golden Week distortions to consider, made more disruptive by the timing of it this year as different from last year. And then we have to consider possible effects of tariffs and restrictions at the start of what is called a trade war (but isn’t really,...

Read More »

US Imports Don’t Quite Match Chinese Exports

2018-04-12

by

2018-04-12

US Trade Balance, Jan 2014 - 2018
In early 2015, a contract dispute between dockworkers’ unions and 29 ports on the West Coast of the US escalated into what was a slowdown strike. Cargoes piled up especially at some of the largest facilities like those in Oakland, LA, and Long Beach, threatening substantial economic costs far and away from just those directly involved. Each side predictably blamed the other for it.

Read More »

FX Daily, April 02: Monday Blues

2018-04-02

by

2018-04-02

The US dollar drifted a little lower in Asia to start the week while equities had a slightly heavier bias. The MSCI Asia Pacific Index slipped 0.1%. European bourses are mostly closed for the extended Easter holiday, while the S&P is set to start the new quarter about 0.3% lower. Although the subdued price action may not reflect it, there have been several new economic reports and developments.

Read More »

Emerging Markets: Preview of the Week Ahead

2018-04-02

by

2018-04-02

EM FX was mostly stronger last week, despite the dollar’s firm tone against the majors. Best EM performers on the week were MXN, KRW, and COP while the worst were ZAR, INR, and PEN. US jobs data poses the biggest risk to EM this week, as US yields have been falling ahead of the data. Indeed, the current US 10-year yield of 2.74% is the lowest since February 6.

Read More »

FX Daily, March 29: Bonds and Stocks are Firm, While the Greenback Consolidates Upticks

2018-03-29

by

2018-03-29

The choppy US equity session yesterday, ultimately ending with modest losses as the tech sector remained under pressure, has been shrugged off in Asia and Europe, where modest gains have been seen. The dollar is little changed after yesterday's gains, and bonds are mostly firmer.

Read More »

FX Weekly Preview: The Investment Climate

2018-03-26

by

2018-03-26

The investment meme of a synchronized global upturn has been undermined by the recent string of US and European economic data. The flash March eurozone composite reading fell to 55.3, the lowest reading since January 2017. Although Q4 17 US GDP may be revised higher (toward 2.8% from 2.5%) mostly due to greater inventory accumulation, the curse of weak Q1 GDP appears to be showing its hand again, with forecasts now coming in below 2%.

Read More »

The Boom Reality of Uncle He’s Globally Synchronized L

2018-03-21

by

2018-03-21

China GDP, Apr 1993 - Mar 2018
Top Chinese leadership is taking further shape. With Xi Jinping’s continuing consolidation of power going on right this minute, most of the changes aren’t really changes, at least not internally. To the West, and to the mainstream, what the Chinese are doing seems odd, if not more than a little off. Unlike in the West, however, there is determined purpose that is in many ways right out in the open. Many here had been expecting that outgoing PBOC...

Read More »

Emerging Markets: What Changed

2018-03-19

by

2018-03-19

Hong Kong may impose a tax on unsold apartments as an effort to increase supply and cool off the housing market. Bank of Israel’s MPC had a split vote last month for the first time in three years. South Africa President Ramaphosa said the ANC wants Julius Malema of the opposition EFF to rejoin the party. Former South Africa President Zuma will face trial on 16 criminal charges.

Read More »

China’s Questionable Start to 2018

2018-03-16

by

2018-03-16

China Industrial Production, Feb 1999 - 2018
The Chinese government reported estimates for Industrial Production, Retail Sales, and Fixed Asset Investment (FAI) for both January and February 2018. The National Bureau of Statistics prepares and calculates China’s major economic statistics in this manner at the beginning of each year due to the difficulties created by calendar effects (New Year Golden Week).

Read More »

China Prices Include Lots of Base Effect, Still Undershoots

2018-03-13

by

2018-03-13

China Price Stability, Feb 1996 - 2018
By far, the easiest to answer for today’s inflation/boom trifecta is China’s CPI. At 2.9% in February 2018, that’s the closest it has come to the government’s definition of price stability (3%) since October 2013. That, in the mainstream, demands the description “hot” if not “sizzling” even though it still undershoots. The primary reason behind the seeming acceleration was a more intense move in food prices.

Read More »

Emerging Markets: Preview Week Ahead

2018-03-12

by

2018-03-12

EM FX ended Friday on a firm note and capped off a mostly firmer week. MXN, KRW, and ZAR were the best performers last week, while CLP, CZK, and PLN were the worst. US jobs data was mixed, with markets focusing on weak average hourly earnings rather than on the strong NFP number. Still, the data did nothing to change market expectations for a 25 bp by the FOMC this month.

Read More »

China Exports: Trump Tariffs, Booming Growth, or Tainted Trade?

2018-03-11

by

2018-03-11

China Exports, Jan 2008 - Jan 2018
China’s General Administration of Customs reported that Chinese exports to all other countries were in February 2018 an incredible 44.5% more than they were in February 2017. Such a massive growth rate coming now has served to intensify the economic boom narrative.

Read More »

China Going Boom

2018-03-08

by

2018-03-08

China Gross Domestic Product, Apr 1993 - 2017
For a very long time, they tried it “our” way. It isn’t working out so well for them any longer, so in one sense you can’t blame them for seeking answers elsewhere. It was a good run while it lasted. The big problem is that what “it” was wasn’t ever our way. Not really. The Chinese for decades followed not a free market paradigm but an orthodox Economics one. This is no trivial difference, as the latter is far more easily accomplished in a place...

Read More »

Emerging Markets: Week Ahead Preview

2018-03-05

by

2018-03-05

EM FX ended Friday on a mixed note, capping off a largely softer week.  Best performers last week for MYR and TWD while the worst were ZAR and ARS.  US stocks clawed back early losses and ended the week on a firmer note but we think further market turbulence is likely. 

Read More »

Data Distortions One Way Or Another

2018-03-04

by

2018-03-04

China Manufacturing PMI, Feb 2007 - 2018
Back in October, we noted the likely coming of two important distortions in global economic data. The first was here at home in the form of Mother Nature. The other was over in China where Communist officials were gathering as they always do in their five-year intervals. That meant, potentially. In the US our economic data for a few months at least will be on shaky ground due to the lingering economic impacts of severe hurricanes.

Read More »

Emerging Markets: Week Ahead Preview

2018-02-26

by

2018-02-26

EM FX ended Friday on a mixed note and capped off a soft week overall. Best performers last week were ZAR, CLP, and PHP while the worst were TRY, ARS, and IDR. Fed Chief Powell’s testimony to Congress will likely draw market attention back to Fed policy.

Read More »